• Cut-off date: Submit this assignment no later than the due date mentioned on your LMS/Moodle. ALL late submissions require approval from the branch course coordinator and will be subject to grade deductions.• Learning outcomes: The purpose of this assignment is to support students’ understanding and application of different concepts learned in B222A, mainly: internal acquisition through R&D.• Word count: you should discuss the questions in no more or less than the number of words mentioned for each question (plus or minus 10%).• Referencing: You must acknowledge all your sources of information using full Harvard Style Referencing (in-text referencing plus list of references at the end). Use E-library: to get journal articles on the topic (Emerald, EBSCO, Proquest…). Use at least 2 articles.• Plagiarism: Remember that you should work the information from references into your own original thoughts and INTO YOUR OWN WORDS. Plagiarism will lead to a significant loss of marks. Extensive plagiarism could mean that you failed your TMA. (Refer to AOU definitions of cheating and plagiarism at the end of this document)• Essay guidance: Your response to each question should take the form of a full essay format. Avoid using subheadings and bullet points. Use B222A textbook and slides, the case, and E-Library. Plan what you will write, and have a well-organized outline.• Using PT3 form: When you have completed your TMA, you must fill in the assignment form (PT3) posted on your moodle account, taking care to fill all information correctly.• Moodle upload: A soft copy of your TMA and PT3 form should be uploaded to your LMS account via the link posted there, within the cut-off date.• This TMA is 20% of B222A Grade.

II- CASE TO STUDY

The 10 biggest R&D spenders worldwideMichael Casey,Robert HackettNov 17, 2014“Innovative” has become, it seems, a trite descriptor, since marketing departments plaster the word everywhere. So who is actually investing the most in research and development? As it turns out, companies are spending more on R&D than ever before. The Global Innovation 1000, a list of public companies that spend the most on innovation, last year invested a record $647 billion, an increase of $9 billion over the previous year. That total represents two-fifths of all innovation spending by organizations worldwide, according to a report from Strategy&, the consultancy formerly known as Booz & Co.Where does all that money go? Over the past decade, two industries have accounted for half of all R&D spending: healthcare and computers. Other resource-intensive industries include healthcare, autos, and software. Fortunecombed through the annual reports of Strategy&'s top 10 to learn more about how big companies spend their R&D budgets. Here's what we found.

1. Volkswagen• R&D spending in 2013: $13.5 billion• As a percentage of revenue: 5.2%For the third year in a row, the German carmaker tops the Strategy& list of research and development spenders. Volkswagen says its spending results from being a “highly competitive and innovative car manufacturer which must fulfill a whole host of environmental and safety standards.” Much of that spending has gone into hybrid vehicles and adding new technology, including semi-autonomous features to some of its 12 brands. It also is looking to reduce CO2 emissions across its fleet and invest in ways to electrify vehicles.

2. Samsung• R&D spending in 2013: $13.4 billion• As a percentage of revenue: 6.4%The South Korean conglomerate claims second place once again. Its many R&D centers range from Silicon Valley to Bangalore to Beijing. The company says it is developing a smart TV monitor and a smart TV service as part of its research program. Domestically, Samsung breaks R&D into three organizations: business unit development teams that have a one-to-two year development outlook; research institutes that have a three-to-five year development outlook; and the Samsung Advanced Institute of Technology, which works on projects with a further line of sight.

3. Intel• R&D spending in 2013: $10.6 billion• As a percentage of revenue: 20.1%The Santa Clara, Calif.-based chip manufacturer invests in R&D to keep pace with Moore’s Law, an observation by company co-founder Gordon Moore in 1965 that computing power doubles every two years. As the company works to cram more transistors onto its circuits, development eats most of the company’s R&D spending. “It’s getting more expensive to do the development piece of it because wafers get more expensive over time as more steps get added to the process,” says Michael Mayberry, vice president and director of components research at Intel. “Complexity drives cost.” One recent example of the company’s R&D efforts includes the 14nm Intel Core M processor, which is half the size of the previous generation of chips with 20% longer battery life and 60% less energy expenditure.

4. Microsoft• R&D spending in 2013: $10.4 billion• As a percentage of revenue: 13.4%Microsoft, the biggest spender among software and Internet companies, likes to refer to the “small r” and the “big D.” The company prides itself on developing products for the current market while searching for the next big thing. With more than 1,000 doctorate-holding researchers, its research program contributes to nearly everything the company ships today—one of the latest examples being Microsoft Band, a wearable device that aims to help people live a healthy and more productive life. Over the years, other technologies emerging from the company’s R&D program have included Xbox 360 and Xbox One, Kinect and Skype Translator.

5. Roche• R&D spending in 2013: $10 billion• As a percentage of revenue: 19%Leading the healthcare industry in R&D spending, the Swiss biopharmaceutical company spends more today than it did when it topped the Strategy& list three years ago. The company invests an overwhelming majority of its R&D budget —almost 90%—on pharmaceuticals, while the rest goes into diagnostics. Oncology, the largest part of Roche’s business, eats about half of its pharma R&D spending. One of the company’s latest drugs, a targeted medicine for advanced breast cancer called Kadcyla, was approved in the U.S. and E.U. last year. Roche says it is looking to leverage parts of the Kadcyla platform (for instance, the innovative way it links chemotherapeutic agents and antibodies) for future drugs.

6. Novartis• R&D spending in 2013: $9.9 billion• As a percentage of revenue: 16.8%As the second-biggest health care spender, Novartis invested nearly 17% of its revenues into R&D in 2013 and has more than 200 projects in clinical development, including 138 in pharmaceuticals. Among the big discoveries from its R&D program was the drug Zykadia, which treats patients with a certain form of lung cancer and, in August, the company presented data on its drug LCZ696, an investigational heart failure medicine, showing it was superior to the current best treatments. And in October, an advisory committee to the FDA approved unanimously to support the approval AIN457 (secukinumab) for the treatment of moderate-to-severe plaque psoriasis.

The Japanese automaker's biggest R&D investment areas include environmental and hybrid systems like electric and fuel cell vehicles as well as safety technologies, like vehicle dynamic control and crash safety performance. In its Q2 financial results, the company reported that these technologies are “a foundation for future growth. We will focus our investment in these areas.”8. Johnson & Johnson• R&D spending in 2013: $8.2 billion• As a percentage of revenue: 11.5%

The American health care company has long prided itself on investing in R&D and for the past five years has consistently been among the top spenders in the pharma industry. That investment has paid off big, with the pharmaceutical business launching 14 new compounds since 2009. J&J says it plans to file more than 10 new drugs and 25 line extensions between 2013 and 2017.

9. Google• R&D spending in 2013: $8 billion• As a percentage of revenue: 13.2%Known for pursuing moonshot R&D projects, the Mountain View, Calif.-based Internet company has invested in seemingly outlandish technologies such as self-driving cars, computer eyewear and balloon-distributed Wi-Fi. The company employs about 18,600 people in research and development according to its latest annual report, and most of its R&D costs go into staffing and personnel support. According to Google's annual report, "our product development philosophy is to launch innovative products early and often, and then iterate rapidly to make those products even better."

10. Merck• R&D spending in 2013: $7.5 billion• As a percentage of revenue: 17%The N.J.-based pharmaceutical company lists its top R&D investment priorities as oncology, infectious diseases, vaccines, and diabetes. This year Merck received approval from the FDA for an immuno-oncology drug called Keytruda that treats a dangerous form of skin cancer known as advanced melanoma. “We see Keytruda and immuno-oncology drugs as a fundamental change in how we treat cancer patients,” says Dr. Roy Baynes, senior vice president of global clinical development. Merck is also extending studies of the drug to more than 30 other tumor types, he says.

III- QUESTIONS:Answers to these questions should be based on: the case study, material learned from the textbook related to different TM concepts (acquisition, external acquisition, types of external collaboration…) and online sources (i.e. companies’ webpages, AOU e-library databases…)1- The role of R&D in all companies of all sectors is crucial, especially in technological industries. Elaborate on this importance, for all sectors in general and for technological companies in particular and explain how it is linked to innovation. Give examples to support your answer. (300 words – 30 marks)

2- Choose one of the companies listed above, visit its website and other web pages you find interesting for your search, and elaborate on its R&D department and activities (number of employees in the department, budget allocated, spending on R&D, areas of research, latest innovations…) – (350 words – 35 marks)

3- Choose a recent technology or product introduced by one of the companies listed in the text above and discuss its characteristics reflecting on the innovative side of it comparing to similar of competitive products. (350 words – 35 marks)

IV- GRADES DEDUCTION:TMA Presentation:Up to 5 marks should be deducted for poor presentation or poor organization of the TMA outline and discussion or TMA presented without PT3.Proper referencing: Referencing should be both in-text referencing, plus a list of references at the end using Harvard style. Up to 5 marks should be deducted for poor referencing.

Use of E-Library:A minimum use of 2 articles from AOU e-library is required to support the discussions. Up to 5 marks should be deducted for no use or poor use of e-library.

Word count:The answers should be within the specified word count. A deviation of 10% is acceptable; if more, a deduction up to 5 marks will be applied.

V- AOU POLICY ON PLAGIARISM:Arab Open University Definitions of cheating and plagiarism:Plagiarism means copying from internet, from unreferenced sources, from other students’ TMAs or any other source. Penalties for plagiarism range from failure in the TMA or the course, to expulsion from the university.According to the Arab Open University By-laws, the following acts represent cases of cheating and plagiarism: • Verbatim copying of printed material and submitting them as part of TMAs without proper academic acknowledgement and documentation.• Verbatim copying of material from the Internet, including tables and graphics.• Copying other students’ notes or reports.• Using paid or unpaid material prepared for the student by individuals or firms.• Utilization of, or proceeding to utilize, contraband materials or devices in examinations.

Penalty on plagiarism: The following is the standard plagiarism penalty applied across branches as per Article 11 of the university by-laws was revisited and modified to be more explicit with regard to plagiarism on TMAs. Penalties include the following:1) Awarding of zero for a TMA wherein more than 20% of the content is plagiarized.2) Documentation of warning in student record.3) Failure in the course to dismissal from the University.

VI- AOU POLICY ON LATE SUBMISSIONS:As per the terms stated in the “Late Submission Policy for Tutor Marked Assignments-TMAs”, sent by the deanship on 10/11/2016, TMA late submission is subject to grades deduction according to the following:1- Late submission – Within the 6 days after the due date: reduction of 10% (of the total TMA grade) for each day late.2- Late submission – After day 6: the necessity to submit a late submission justification form and decision will be taken by the respective BCC and PC. 3- No submission: a zero grade will be attributed to the TMA in case of non submission

VII- PT3 FORMUse of PT3 form is mandatory as a cover page for your TMA. This form is provided to you by your tutor or posted on LMS. TMA presented without PT3 form is subject to grades deduction. This PT3 form will be used by your tutor to add comments and marks and will be returned to you with the annotated work.